Telstra, the leading Australian telecom and media company has formed a high-powered taskforce to negotiate with the Australian government over the planned $43- billion national broadband network (NBN) (See: Australian government to set up $30-billion broadband network).  

The taskforce had been formed a few days prior to an announcement last week to provide for continuity in dealings with government beyond chief executive Sol Turjullo's tenure which ends in June.

The group will report to the board and includes chairman Donal McGauchie. Others in the committee include chief financial office John Stanhope, board members Peter Willcox and John Stocker, group managing director of Telstra, David Thodey, group managing director or Telstra enterprise and group managing director of strategic marketing Kate Mckenzie.

The move is being seen as a major departure from the aggressive four-year strategy of McGauchie. Under the new approach the company will formulate plans to voluntarily separate its wholesale and retail arms and also sell some assets to the government's proposed $43-billion broadband network.

The committee will reportedly look into how best to respond to the government's announcement on building the NBN and regulatory amendments that might include Telstra being forced to sell a range of valuable assets.

In a message to staff, Trujillo said that the discussions would clearly be protracted and continue beyond his tenure. He said they had therefore established a joint-board committee capable of conducting negotiations over the months and possibly years.

He added that the Telstra would be in a better position to deal with any strategic options that may need to be considered from knowing more about the government's long-term plans for broadband. According to industry sources Trujillo will play probably play no part in formulating any new strategies and rolling back the company's aggressively uncooperative approach.

News of Telstra's plan comes on the heels of speculation in the media that the new broadband network would be operational only with a massive government subsidy. They say that unless it is assumed that the vast majority of potential customers take up the Rudd net services and are willing to pay very high monthly fees to the tune of $150 to $200 per month, Rudd net cannot be expected to deliver a commercial return on $43 billion of investment.

According to experts, the options for Telstra would include Telstra selling some off its existing fibre assets for a minority stake in the new government-owned broadband company. The government wants this to reduce likely costs to taxpayers of the proposed network and also the complexity of building it over eight years they point out.

According to the government, under the current regulatory system of limited operational separation no viable competition to the dominant player has emerged and quick action therefore needs to be taken.  (Also see: Telstra slams Aussie government's broadband tender process)